Sometimes your monthly payment and total minimum payment will be the same amount. But sometimes they won’t.
The total minimum payment is the total of the monthly payment and any past due or over-limit amounts that you’ll have to pay before the due date. This is the minimum contracted amount you’ve agreed to pay each statement. Paying at least this amount by its due date helps you avoid a late payment fee (so you can keep using your card).
But the downfall is it’ll take a long time for you to pay off your balance. Even if you’ve reached your credit limit and stop using it for purchases, the interest will increase as long as there’s a balance to pay off.
And what if you’re paying less than the minimum amount? This will work against you. Not only will you still pay interest, but you’ll be charged a month’s worth of interest calculated on your balance for each day of that statement period. And you’ll lose your interest-free days for the next statement period. And if you didn’t pay your balance in full, or if you have a balance transfer your interest free days payment, for the previous month, you could now be paying interest on interest. It adds up. Paying less (now) means paying more (eventually).
If you’re struggling to pay off your card, you need to talk to us as soon as you can. If so, head over to our Financial Hardship section. We’re here to help however we can.
A monthly payment is the amount due from purchases and transactions you’ve made during your monthly statement period. We work this out by looking at your closing balance for that month.
If your closing balance is:
- more than $1,250, your monthly payment is 2% of the closing balance
- $25 - $1,250, your monthly payment is $25
- less than $25, your monthly payment is the full balance amount.
Balance transfer 'interest free days payment'
While you have a balance transfer, to avoid paying interests on purchases make sure you pay your interest free days payment in full by the due date each month.
But how much you pay does make a difference in the next statement period, because…
Interest is calculated daily
The daily interest is based on that day’s closing balance. That’s the total of everything you haven’t paid back (including fees, purchases and cash advances), plus any interest charges.
By making a part payment, you reduce your opening balance for the next statement period. But because you haven’t paid the balance in full, or if you have a balance transfer your interest free days payment, you won’t have any interest-free days, so you’ll still get charged interest every day based on the daily closing balance. So by making a bigger part payment you’ll reduce your daily balance, which reduces the amount of interest you’ll pay.
The only way to prevent interest charges adding up is to pay your closing balance in full, or if you have a balance transfer your interest free days payment. It’s the only way to get your interest-free days on purchases for the next month.